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Melaleuca, Inc. v. Shan

United States District Court, D. Idaho

September 10, 2018

MELALEUCA, INC., an Idaho corporation, and MELALEUCA CHINA WELLNESS PRODUCTS CO., LTD. a wholly-owned subsidiary of Melaleuca, Inc., Plaintiff,
v.
KOT NAM SHAN, an individual, and SHAKLEE CORP., a Delaware corporation, Defendants.

          MEMORANDUM DECISION AND ORDER

          DAVID C. NYE, U.S. DISTRICT COURT JUDGE.

         I. INTRODUCTION

         Pending before the Court is Defendant Shaklee Corp.'s (“Shaklee”) Motion to Stay. Dkt. 80. Having reviewed the record and briefs, the Court finds that the facts and legal arguments are adequately presented. Accordingly, in the interest of avoiding further delay, and because the Court finds that the decisional process would not be significantly aided by oral argument, the Court will address the motion without oral argument. Dist. Idaho Loc. Civ. R. 7.1(d)(2)(ii). For the reasons outlined below, the Court finds good cause to GRANT Shaklee's Motion to Stay.

         II. BACKGROUND

         The factual background underlying this dispute is set forth in the Court's previous Decision. Dkt. 74., at 2-8. The Court incorporates that background in full by reference.

         In the Court's previous decision, it dismissed all of Plaintiffs Melaleuca Inc. and Melaleuca (China) Wellness Products Co., Ltd.'s (hereinafter referred to collectively as “Melaleuca”) claims against Defendant Kot Nam Shan (“Kot”) on forum non conveniens grounds. Dkt. 74, at 21. In light of those dismissals, the Court noted that it “still has before it two claims for tortious interference of contract Plaintiffs asserted against Shaklee. At this juncture, it may be appropriate to stay these claims. However, the Court will not take such action sua sponte.” Id. On May 17, 2018, Shaklee filed a Motion to Stay the remaining claims pending the resolution of Melaleuca's claims against Kot in China.

         III. ANALYSIS

         A. Legal Standard

         The Court “has broad discretion to stay proceedings as an incident to its power to control its own docket.” Clinton v. Jones, 520 U.S. 681, 706-707 (1997) (citing Landis v. N. Am. Co., 299 U.S. 248, 254 (1936)). “A trial court may, with propriety, find it is efficient for its own docket and the fairest course for the parties to enter a stay of an action before it, pending resolution of independent proceedings which bear upon the case.” Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d 857, 863-64 (9th Cir. 1979). Determining whether to grant a motion to stay “calls for the exercise of judgment, which must weigh competing interests and maintain an even balance.” Landis, 299 U.S. at 254-55. “When considering a motion to stay, the district court should consider three factors: (1) the potential prejudice to the non-moving parties; (2) the hardship and inequity to the moving party if the action is not stayed; and (3) the judicial resources that would be saved.” In re Micron Tech., Inc. Secs. Litig., No. CV-06-085-S-BLW, 2009 WL 10678270, at *2 (D. Idaho Dec. 7, 2009).

         B. Prejudice to Melaleuca

         Melaleuca must make “an initial showing that there is a fair possibility that [it] will be injured by a stay.” Id. at *3. Melaleuca argues that it easily satisfies this burden because:

By the time the stay is lifted-which could be more than a year from now-the harm will already be done, and will be impossible to remedy. Mr. Kot will be entrenched at Shaklee; Melaleuca's employees and Marketing Executives may be substantially poached; and Shaklee may already have taken advantage of Melaleuca's confidential information. . . . Shaklee's continued employment of Mr. Kot in violation of his non-compete obligations poses an ongoing threat of substantial and irreparable harm to Plaintiffs' business.

Dkt. 87, at 7-8.

         This argument, however, appears to rest primarily on speculation. Melaleuca has previously asserted that “most of the damage to the former company is often done within a period of a few months. By far the largest numbers of customers and/or independent marketing representatives tend to leave in the first onslaught.” Dkt. 39, at 23. Approximately eight months have now passed since Kot began working for Shaklee. Yet, Melaleuca has not identified a single employee that Shaklee has poached in that timespan. Nor has ...


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